Final answer:
The chase strategy adjusts production to fluctuating demand, while the level strategy maintains consistent output. S&OP affects HR in terms of workforce management and finance in budgeting and cash flow.
Step-by-step explanation:
The chase strategy and the level strategy are two different approaches to sales and operations planning (S&OP) used by firms to match supply and demand efficiently. The chase strategy involves adjusting production rates or workforce levels to align with the fluctuating demand over time, making it a more flexible approach but often leading to variable costs regarding employment and inventory management. In contrast, the level strategy keeps production consistent despite demand fluctuations, which may require maintaining inventory or absorbing periods of lower activity, aiming for stable production costs and workforce levels.
The sales and operations plan has a significant impact on the human resources and finance functions of a firm. It dictates the workforce required, affecting hiring, training, and employee retention policies within the HR department. For finance, it influences budgeting, cash flow management, and investment decisions, as the plan determines the anticipated costs and revenues associated with production levels.